Tobacco Asia

Volume 20, Number 5

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tobaccoasia 15 FRONT PAGE NEWS 卷首新闻 which combined brought in close to 40% of KT&G's 2015 profits. The marketing pitch in these markets was to promote varied super-slim, low-tar options to the markets rather than pushing one significant brand. KT&G's Time was a hit in the US while Esse was popular in the Asia-Pacific region New market sales for KT&G grew last year, most noticeably in the US, with a nearly 40% increase from 2014; Mongolia, where Esse sales grew 120-fold, and Africa, where 2.8 billion cigarettes were sold due to the surge in demand for super-slim cigarettes there. A company statement has an- nounced that KT&G is "beefing up product quality to consolidate No. 1 tobacco maker position in potential overseas markets." EUROPE Fund Firms Resist Campaign The Global Taskforce for Tobacco Free Portfolios, a global campaign launched almost two years ago trying to persuade money managers to blacklist tobacco stocks and backed by the Union for International Cancer Control, has met with resistance from European fund managers, with only one major European investor, Axa, falling in the campaign. Axa explained its decision by saying that its role as a health insurer meant it could no longer justify investing in something that had such a "tragic" impact on public health. At the time of the announcement this May, the company held €200 million in tobacco stocks and about €1.6 billion (US$1.8 billion) in bonds issued by the cigarette makers. As of early September Axa has almost completed selling the shares but will keep the bonds until they mature. The bulk of their investment, about 97%, will only be off its books in 2017. Other investors seem to be sticking with the tobacco companies, saying they are duty-bound to seek the best returns for their clients. Even a treaty backed by the United Nations, which aims to cut tobacco consumption by almost a third within 10 years, is failing to deter many investors from companies like Philip Morris International (PMI), British American Tobacco (BAT) Japan Tobacco (JTI), and Imperial Brands. The Taskforce has persuaded more than 30 Australian superannuation funds to divest from tobacco but the campaign faces a tougher challenge in Europe and in the US, where the California Public Employees' Retirement System is reviewing a 16-year investment ban on tobacco after a study estimated the policy had cost it US$2-3 billion in returns.

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